Workers' Compensation Insurance in Florida

clock February 23, 2021

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Who Is Exempt From Workers Compensation Insurance In Florida?

In 2018, Florida had more than 58,000 workers’ compensation cases. Every state in the US requires workers’ compensation insurance—except for Texas. Though, each state’s requirements will vary. For businesses in the state of Florida, it’s important to stay on top of the rules and regulations that pertain to your employees. This includes workers’ compensation insurance in Florida. 

Without proper coverage, employers can get stuck paying these costly claims out-of-pocket.

There is a balance between saving money on the cost of insurance and keeping your employees effectively covered. 

But, not all employees carry a high risk of illness or injury in their workplace. As such, there are some workers exempt in the eyes of the Florida Department of Insurance.

Keep reading to learn more about what types of employees are legally exempt from workers’ compensation insurance in Florida.

What is Workers’ Comp?

Workers’ compensation coverage (also known as workers’ comp) is a form of social insurance. It serves to protect companies from lawsuits after a workplace injury.

Workers’ comp is an insurance policy taken out by an employer. It covers lost wages and other fees for employees who become ill or injured while working. Some of these costs might include:

  • Lost wages
  • Medical bills
  • Medication expenses
  • Rehabilitation costs
  • Death benefits

It’s important to note these policies only apply to injuries that occurred at the workplace, due to some circumstance of the work. This means that something like a slip and fall on the property, or getting hit by a piece of equipment is covered.

Something like getting into a car accident on the way to work in the morning would not be covered under workers’ compensation insurance.

Why Do I Need It for My Business?

This insurance is important in protecting both employers and employees. For employers, it protects the company against costly lawsuits.

In the event of an illness or injury directly resulting from workplace conditions, there is a back-up plan. This will help pay the costs associated with this incident. Without it, you might be stuck paying for these costs out-of-pocket.

For employees, it protects them against paying these costs on their own after suffering a workplace illness or injury.

List of Requirements for Workers’ Compensation Insurance in Florida

Under Florida state law, the level of coverage will depend on many factors. This includes the size of the company, the nature of the work, and the industry.

For construction companies, employers must provide workers’ comp insurance when there is at least one employee. For other non-construction companies, workers’ comp must be provided with four employees or more.

Generally speaking, this insurance is calculated per $100 of payroll.

Other important factors include the workers’ classification code rate. This is state-issued and depends on the nature of the work performed.

Also, the experience modification number plays a role. This is another state-issued figure that compares your company to other industry counterparts.

The rough formula is to multiply workers’ classification code rate, by the experience modification number, by the value of payroll divided by 100. This calculates the premium.

Changes to Laws for Workers’ Compensation Insurance in Florida

At the beginning of the year in 2020, the Florida workers’ comp laws changed slightly. At the start of the year, the required rate for workers’ comp reduced by 7.5 percent—almost one-this since the past few years.

One of the main reasons for this change is that the rate of occurrence of workplace injuries has decreased significantly in recent years.

With safer workplaces, increased automation, and modern technologies in place, fewer employees are making claims for workers’ compensation insurance in Florida.

Another big change to Florida workers’ comp laws is the increase in maximum compensation claim amounts. As such, the compensation rate for a week of lost wages is equal to the average state-determined “weekly wage.”

Workers Exempt From Workers’ Compensation Insurance in Florida

It’s true that workers’ compensation insurance in Florida is required for most companies. Although, there are some exceptions to certain groups of employees to remove the need for this insurance.

Small Companies

For companies with four or fewer employees, workers’ compensation insurance is not required in Florida. This does not include agricultural or construction companies. 

Select Agricultural Companies

Some agricultural companies are also exempt from laws requiring workers’ compensation insurance in Florida.

If there are six or fewer full-time employees—or 12 or fewer seasonal employees—the company is not required to get workers’ comp insurance.

Corporate Officers

One of the most common examples of this includes corporate officers. They can use an online exemption form to elect to be exempt from this coverage.

They may choose to do this for a few reasons. First, if they do not foresee the need to recover workers’ compensation benefits.

But also, by electing not to be covered, they remove their salary from the payroll calculation numbers. This thereby reduces the premium for the company.

To file for an exemption, the officer must meet the following requirements.

For a Non-Construction Industry Corporate Officer

There is no limit to the number of corporate officers who may apply for this exemption in non-construction industry companies. Though, they must meet these qualifications:

  • The corporation must be registered with the Florida Department of State (Division of Corporations)
  • The applicant must be listed as an officer of the corporation on the state’s records

There is no application fee for this process.

For a Construction Industry Corporate Officer

As the construction industry carries significantly more risk for injury, there are more stringent rules as to who may opt-out of workers’ compensation coverage.

To be eligible, they must meet the above-listed qualifications. Additionally:

  • The applicant must own 10 percent or greater of the corporation’s stock (confirmed by a stock certificate/notarized statement)
  • The applicant must list all certified/registered licenses

Unlike the non-construction category, there is a $50 fee associated with construction industry officers. Plus, no more than three corporate officers may elect to be exempt.

Sole Proprietors and Partnerships

Companies listed as either sole proprietorships or partnerships may elect to not use workers’ compensation insurance. In order to do so, they must file for a certificate of exemption with the state.

If more employees are added to the operation, they would then require workers’ comp insurance.

Turning to the Experts

When it comes to workers’ compensation insurance in Florida, a careful balance is required. Business owners and management are always looking to balance the need to protect themselves and their employees while keeping the cost of insurance low.

Workers’ compensation insurance is much of the same. Luckily, some classes of employees are exempt from the requirement to obtain this insurance.

For help in navigating the laws as they apply to your company, it’s best to contact an expert in the field. Contact us today for more information or a fast, free quote!

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